S. Korea urges North to repay loans

Published : 2014-04-02 10:47
Updated : 2014-04-02 10:47

South Korea has called on North Korea to repay millions of dollars in loans it provided years ago, an official said Wednesday, amid rising tensions over Pyongyang's live-fire artillery drills and its threat of a nuclear test.

South Korea's state-run Export-Import Bank sent a message to its North Korean counterpart on Tuesday to inform the North of its debt obligations, said the official at the unification ministry.

The move came a day after North Korea failed to pay back $7 million as the third installment of principal and interest on $724 million that South Korea lent as assistance.

It marked the third time that North Korea has missed the deadline to meet its obligation.

South Korea provided rice and corn in loans worth $724 million to North Korea between 2000 and 2007, during which two liberal South Korean presidents sought reconciliation with North Korea.

The North failed to repay South Korea $11.61 million in principal and interest for the food loans in 2012 and 2013.

Separately, North Korea has also failed to pay back $8.6 million in what should have been the first repayment of the principal and interest on assistance worth $80 million.

It remains unclear whether North Korea will respond to Seoul's demand for repayment.

In 2007, South Korea provided the North with $80 million worth of raw materials to help produce clothing, footwear and soap in return for minerals such as zinc.

South Korea says the North is required to pay back a total of $961.53 million by 2037. (Yonhap)